Travelers Reports Fourth Quarter Net Income Of $304 Million Or $0.78 Per Diluted Share After Catastrophe Losses Of $689 Million After-tax, Including Storm Sandy, Or $1.78 Per Diluted Share

“We are very encouraged by pricing trends across all three business segments. Renewal rate change in Business Insurance was approximately 8%, up from nearly 6% in the fourth quarter of last year and consistent with recent quarters. Renewal rate change in Financial, Professional and International Insurance improved to 4%, and we once again achieved double-digit pricing improvements in Personal Insurance.

“Given the continued low interest rate environment and uncertain weather patterns, we will continue to seek improved pricing. In addition, we remain committed to returning excess capital to shareholders, and in that regard we are especially pleased that notwithstanding the high level of catastrophe losses we again experienced in 2012, we were able to return more than $2.1 billion to shareholders through dividends and share repurchases.

“This was another year in which unusual severe weather events affected many of our customers, and we remain committed to delivering on our promise of helping them restore their lives. Our entire Claim organization has again been called upon to work under difficult circumstances and has responded with their customary care and professionalism. We are deeply appreciative for all that they have done over these difficult months to make sure Travelers does it right,” concluded Fishman.

Fourth Quarter 2012 Consolidated Results

($ in millions)		Three Months Ended December 31,
		2012					2011					2012					2011
		Pre-tax										After-tax
Underwriting gain (loss)		$	(338	)			$	187				$	(232	)			$	115
Underwriting gain (loss) includes :
Net favorable prior year reserve development			222					126					146					83
Catastrophes, net of reinsurance			(1,054	)				(102	)				(689	)				(68	)
Net investment income			689					652					556					541
Other, including interest expense			(79	)				(75	)				(46	)				(47	)
Operating income			272					764					278					609
Net realized investment gains			39					14					26					9
Income before income taxes		$	311				$	778
Net income												$	304				$	618
GAAP combined ratio			105.4		%			95.9		%
GAAP combined ratio excluding incremental impact of direct to consumer initiative			104.6		%			95.1		%
Impact on GAAP combined ratio
Net favorable prior year reserve development			(4.0	)	pts			(2.3	)	pts
Catastrophes, net of reinsurance			18.7		pts			1.8		pts

Operating income of $278 million after-tax decreased $331 million from the prior year quarter due to a $347 million after-tax decrease in the underwriting results, reflecting the after-tax impact of higher catastrophe losses that were partially offset by higher underlying underwriting margins (which excludes net favorable prior year reserve development and catastrophe losses) and higher net favorable prior year reserve development.

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